The Dealer Bill of Rights is fair to all

All auto dealers want is an honest and open relationship, with transparency and clear, fairly applied rules

By Donna Gaudet Hosmer

Published: May 17, 2013

Imagine being told in order to keep your business or safeguard your current location, you had to completely remodel your office or store.

You are told: “Follow these exact design standards, use this exact equipment at an inflated price, hire only from this out-of-state and more costly list of contractors, and follow these precise timelines.”

Imagine your reaction when, just a few years later, you’re asked to remodel all over again.

That may sound farfetched, but it’s become a frustrating and new reality in the auto sales industry.

In our industry, basic control over one’s facilities is critical. Our dealership recently completed a Nissan addition as part of a negotiated condition to allowing us to relocate. Their blueprint was for a mandatory six-car showroom.

To keep the franchise, we had to agree to their plan even though it was a lot more facility than we needed, and they couldn’t show data that our investment would increase our sales or service volume. Ironically, after it was done, we were visited by some of Nissan’s top brass who admitted we built “too big.”

That lack of control over our property cost us more than $100,000 and forced us to spend “too much.”

We had no say. We had to buy their image materials with single-source vendors at twice the price. Local vendors, who were our customers, were squeezed out, and our dollars were tied up. Why? No one gave us a good answer, but if we’re over-expensed and default on our financing, we lose the franchise.

This is what dealers face in working “with” manufacturers. We are frequently told what to spend and when to spend it. Many dealers are forced to “buy” factory service equipment that is neither requested nor needed. Still others are told they have to provide specific warranty repairs without being properly reimbursed by the factory.

That is precisely why vehicle dealers statewide strongly support Senate Bill 126, the Dealer Bill of Rights. This proposal closes loopholes in the current law that are being exploited by automakers. SB 126 will inject common sense and clear rules to ensure balance and basic fairness.

• Require actual costs for warranty work to be covered by automakers, saving local dealers many thousands every year

In addition, the bill covers heavy equipment dealers and farm equipment dealers, who face the same imbalance as auto dealers.

The bill passed the New Hampshire Senate by a 21-2 vote.

National automakers claim this law will drive up prices and trigger more lawsuits. But rules similar to those proposed in this bill are already in place nationwide and exist without these alleged problems or additional costs. Why would dealers do anything that raises prices on our own product?

Furthermore, there is no appeals process now, so court is the only option we have today. That’s expensive and too costly because it would take us away from running our businesses.

If local dealers could have negotiated these basic rules ourselves, we wouldn’t have asked lawmakers to help, but dealers have no bargaining power. If we don’t agree to their rules, we lose our business.

That’s what happened to me. We bought a GM franchise not long before the national automaker had declared bankruptcy. Within 14 months of the purchase, our franchise was deemed “sub-standard” by the automaker. We had just gotten started, but it was over without warning, and with no explanation why.

All dealers want is an honest and open relationship, with transparency and clear, fairly applied rules. We urge House lawmakers to support the Dealer Bill of Rights. And we ask fellow business owners to stand with us. Let New Hampshire business owners make decisions that are best for New Hampshire businesses and our consumers.

Donna Gaudet Hosmer, owner and operator of the Tilton-based AutoServ Dealer Group, is chair of the New Hampshire Automobile Dealers Association.

This article appears in the May 17 2013 issue of New Hampshire Business Review